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tv   Studio 1.0  Bloomberg  January 17, 2015 9:00pm-9:31pm EST

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♪ >> he has been called tech's boy genius. perhaps the only ceo who has refused to keep a schedule. david karp started tumblr before he was 20. he sold it to yahoo! before he was 30. it is now one of the most creative and social blogging platforms, all from a guy who dropped out of high school. tumblr founder and ceo david karp. thank you for having this on the
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schedule. >> i do have a schedule now. >> now you are part of yahoo!, you have meetings. >> we have some meetings. this has turned into a major team of 300 people. a major business we launched 1.5 years ago. >> tell me about you, where you grew up. >> i was born and raised in new york city. my mom was a teacher. my dad was a composer. he did a lot of work for television, particularly news. i found myself surrounded by all of this creative technology growing up. in my dad's recording studio. i remember spending those nights and weekends in the recording studio. it felt like the starship enterprise. >> when did you learn how to code?
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>> i learned markup languages when i was 11 years old. one of the first things that drew me into it were these personal identities people were creating for themselves. i saw the aol profiles and away messages. i really loved that expression, that identity. the idea this could be a place to create something that represented you. >> you dropped out of high school when you were how old? >> after my freshman year, when i was 15. >> you were homeschooled. >> computer science education in new york city really did not exist. it was not in high schools. now it is there in a huge way. kids are learning to code in grade school.
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if you have that stuff at your disposal, hang out and spend time with teachers who are proficient and can help you get started. that is something i did not have. >> i spoke to many founders who dropped out and made a lot of money. they don't recommend anybody do what they did. >> if i had access to a computer science education when i was in high school, i would have stuck around. if you can find it there, stick around. >> you went to tokyo when you were 17. why? >> i had my heart broken and needed to get out of here. i was excited because i thought it was a future city, a place with remarkable technology and engineers. i love japan. i ultimately came back to new york with a sense of american entrepreneurialism.
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>> you started tumblr in 2006. tell me how it began. >> i was really noodling on it for a while. coming out of desires i had for something that did not exist at the time. >> what were you trying to create? >> the creative capabilities of the web had vaulted forward. video on youtube was possible. video is one of the hardest things to do and youtube unlocked it. >> it was the beginning of facebook. >> yes. twitter making it easy to publish. my frustration, much of the technology was marching forward but the services people were building were more and more restrictive. facebook was giving you publishing capability but the same vanilla white page everybody else had.
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put your photos on flickr. put your articles on word press or movable type. your videos on youtube. you ended up with different channels. your expression broken up across these networks. >> how did you decide to turn it into a business? >> it decided for itself. we had a couple of weeks between contracts, my consulting company. we were waiting for the next gig. i said, let's just go for it. i feel like we can hack together the basic features. the ability to post anything. tumblr was one of the first platforms that let you post a single photo, a set of photos, a link. a video that you just recorded and edited. it could all go to one place, one blog that was yours. the ability to customize everything, which was also
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novel. >> elon musk has said starting a staring into the abyss of death. here you are, 20 years old. did you have those moments? >> of course. it was horrifying. there have been some, plenty of stomach turning moments. nights without sleep. moments where you feel like you screwed everything up. it is all over. you get used to those moments. you get through them, at least in my role. you get through them knowing the team needs you to be an optimist, to be positive. you need to be the one to paint
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the path forward, show the team how we are going to keep going. the big moment for us, a public one, a few years in. we started to get some popularity and traction. all of the sudden, the site started going down. we could not keep up with the scale or growth. the embarrassing thing for me and the team was, we thought we were really clever. we thought we had figured this out and we would scale this to infinity. little did we know what we did not know. we found ourselves underwater all of the sudden. the site is going down. we are developing a reputation for the site going down. the most stomach turning part was, we had these brilliant creators. people using tumblr to do remarkable things. using it as their home, for their incredible work. were time we screwed up we
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taking their stuff off the internet and out of the world. that was so unforgivable. terrible. it was crushing for me and the team to be screwing up in that way. it was exacerbated by the fact that we had not built out the big robust engineering team we needed the time to get through to the other side. >> you started as a teenager. you go through these highs and lows. how did you develop your own personality and style as a leader? how hard was that? >> i have been lucky to have great investors and mentors from early on. i have great partners with me to steer me to what i should have been doing with my time. for every moment in our history. the way the team has this works
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-- has worked has changed. the people have changed. >> tell me about selling to yahoo! did you want to sell or did you feel like you had to? ♪
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>> tell me about selling to yahoo! how did you start talking to marissa? >> we were looking for partners for strategic investment. we were in the process of raising money. more than just have an investor cut us a check. resources, distribution, content that could make our network better. there were a ton of things to do with yahoo! her vision for what she was trying to do with the company. it was aligned with what we were doing with tumblr.
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where we were going next and what we would need. the other thing was, with marissa, we found an unstoppable positivity and the optimism which we had come to appreciate. it is not universal across this industry. there are plenty of people with brash personalities and occasionally an intense negativity. >> were you trying to sell? >> we needed to raise some money. the conversation with marissa was one of the most exciting conversations we had been having at the time. it escalated from cutting us a check and finding ways to partner together to let's make this official. we wanted to do all of it. that was something big to chew
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on. that was an emotional couple of weeks. it was an incredible offer and opportunity. a year into this thing, something i can say she has lived up to. >> tumblr is technically separate. >> we are a wholly owned subsidiary. we have our own leadership team. sales, finance, all of that. >> what is it like having a boss? >> not all that different than having a board. you always answer to somebody. as soon as it is official, the board says goodbye. they send you nice notes and congratulate you. but they basically say goodbye. >> it is like going off to college. >> it is terrifying. these guys who had been
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partners, mentors of mine on the team, hugely involved. some of them for like seven years. you are now all of the sudden parting ways. we are lucky that we have amazing support and an amazing mentor in marissa. >> what does marissa want from you and tumblr? >> what got her so excited, what got us so excited, she saw the path we were on. >> what have you been able to do with yahoo!? >> the big one came about six months in. we launched tumblr ad products sponsored by yahoo! ad tech. we could go to the market with robust ad technology. with this expressive canvas we had been working on for the last seven years. those two things together was a monster combination for this industry. that suddenly gets to benefit
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from the work we had been doing. >> one of your investors recently talked about companies at some point need to turn into a real business. they need to focus on monetization and profits. he said, tumblr had to be sold even though they had potential. the annual burn rate was almost 50% of the entire fund. how do you respond to that? >> we were making money. we had a big burn rate. the options in front of us. get somebody to cut you a big check. or find and acquire, take on the burn rate. >> what about user growth? give me number is in terms of where tumblr is today. >> at the time of the acquisition, we were 100 million blogs. we crossed over 200 million
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blogs. we reached 450 million people all over the world. comscore says you have less now. it looks like it has dipped. >> we use them for our advertisers. it is pretty far off our audience numbers, which are closer to a global audience of 450 million people. they do not directly measure mobile traffic. >> marissa mayer's acquisition strategy has been criticized and tumblr is her biggest acquisition so far. critics said, tumblr was not making money or growing. how do you respond to those kinds of criticisms? >> we are growing very fast. if she wanted to buy a
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profitable company, there are plenty to choose from. she saw a path forward and something she thought could be not just a big business by the business with a lot of alignments with yahoo! a are one year in and we have lot to brag about. >> what is tumblr's ad strategy? >> we have a novel ad platform. it is about wide open creative expression. trying to get the most creative parts of the industry, to give them a space, a digital space where they can tell those same stories. where they can inspire us to become customers of these brands. where they can inspire us to drive the beamer. or drink a can of coke. yahoo! is building more and more
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content on top of tumblr. digital magazines, yahoo! food. those are built on tumblr. we launched the ability to take that advertising we're developing for the tumblr network, where you come to get the reach demographics and engagement of time on the network. you take that same content and roll it out the yahoo! network. >> i want to ask you about the competition. what do you think of what they are doing? >> they have done a lot of things that nobody else is doing. they are kind of on the other side of a fight we have been fighting. giving people more identity. create something that is theirs. one of the things that drives me bonkers about medium is they try to make it a commoditized network. with lots of long articles from various people rather than a place where i can set up and have my blog.
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but they are doing cool stuff with longform text. vine is doing novel stuff with videos. >> what about facebook? >> we are all kind of vying for attention, but it is different. we found our spot in the big internet. the stuff you go to see on facebook and twitter is created by people you know or celebrities you wish you knew. it is about people. tumblr on the other hand is a little bit more like your tv. it's not about people you know, it is about the stuff you love. >> buzz feed? >> it is cool. they are making great stuff, using tumblr to make great stuff. i was they would run it on top of tumblr. >> there has never been a $10 billion tech company coming out of new york. why not? ♪
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>> how is your life different
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now that you have sold your company for $1 billion? you are not even 30 years old. what do you like to do when you want to act your age? >> it is like, printing or drones or 3-d design. 3-d printing is one of the most creative technologies. that is what it's make sudden. -- that is what gets me energized. >> what have you printed in 3-d? >> i am working on a chess set. a host of things from mechanical design that a temple like me can start to figure out because the software is so good, so accessible. you can watch a five minute youtube tutorial. >> you are doing a bit of tech investing in new york. >> mostly just in my friends' companies. >> there has never been a $10
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billion tech company coming out of new york. there are several in silicon valley. >> i think there will be. i think it is a just a numbers game. there are more coming out of the west coast right now. we have some great ones but not nearly in the same numbers in -- as in the west coast. that's something we are working on. no shortage of ambition in new york. >> what about talent and money? can you get the best talent? >> i think so. we get a lot of talent from the west coast. for all the things that are challenges, they only make us more hungry. we are learning people out here luring people out here. we have a lot to prove that i think we will prove it. >> how optimistic are you about yahoo!'s future? >> i'm excited to be a big part
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of it. i believe in marissa. i think she has built an extraordinary team. i'm excited about a lot of stuff they are doing on their own. i am hopeful and excited to be a shareholder. >> you do not think you will ever start another company? >> tumblr was a bit i really wanted that did not exist. it was never about doing the tech startup. >> net neutrality is important to you and tumblr. you have a position on it. what is it? >> it is important. we should do it right. and not set up laws or rules that stop the next generation of companies, people with ideas. that you have to worry about or spend time in courts or meetings with a handful of carriers that run the world. >> david karp, founder and ceo of tumblr. thank you for joining us. >> thank you.
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this was fun. ♪
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>> it has been five years since haiti was hit by a devastating earthquake. >> we lived one of the worst moments in our history. it was an armageddon-like situation. >> the government says the country is moving forward and haiti is open for business. >> we want to do more. we want to attract more businesses. maybe what we are doing today will show the government that they need to come here and help people to have electricity, running water. >> there are people living in the streets and the country still has horrible

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